Nike has announced it will lay off 740 employees at its Beaverton, Oregon headquarters by June 28. This move is part of a strategic downsizing aimed at refining the company's focus on core growth opportunities in the realms of sports, health, and wellness.
Strategic Workforce Adjustments
The layoffs were disclosed through a notice required by the Worker Adjustment and Retraining Notification Act. Michele Adams, Nike Vice President, outlined in the notice that this reduction is a "second phase of impacts," following earlier announcements of workforce cuts. In a recent memo, Nike CEO John Donahoe indicated that the company planned to reduce its global workforce by approximately 2%, affecting more than 1,600 employees.
As of the end of May 2023, Nike employed about 83,700 people worldwide. The company emphasizes that these difficult decisions are geared towards positioning Nike to leverage significant growth opportunities, citing heightened global interest in sports and wellness.
Financial Context and Future Outlook
This workforce reduction aligns with Nike's three-year plan to cut $2 billion in costs, announced in December. These cost-cutting measures come as Nike anticipates a "low single-digits" revenue decline in the first half of its 2025 fiscal year, which starts on June 1, 2024. According to Nike CFO Matt Friend, this period will be a transitional phase for the company's product portfolio. Despite the planned layoffs and ongoing financial adjustments, Nike's stock saw a nearly 2% rise over the past week, although it has experienced an overall decline of more than 11% this year and a 23% drop over the past 12 months.
Going Forward
As Nike navigates through these transitions, the company remains committed to supporting affected employees and streamlining its operations to focus more intensively on innovation and market leadership in the sports industry.
